Government to Unveil PLI Scheme 1.1 to Enhance Steel Production Tomorrow
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New Delhi, Jan 5 (NationPress) Union Minister of Steel and Heavy Industries H.D. Kumaraswamy will unveil the ‘PLI scheme 1.1’ aimed at the steel industry and officially call for applications during an event at Vigyan Bhavan in the national capital on Monday.
Initially launched in November 2020, the Steel Ministry’s PLI scheme has successfully garnered a commitment of Rs 27,106 crore, creating 14,760 jobs and projecting an output of 7.9 million tonnes of ‘Specialty Steel’, which is essential for the aerospace, defense, power, and automotive sectors. By November 2024, companies had invested Rs 18,300 crore and generated over 8,660 jobs.
According to an official statement released on Sunday, “The Ministry of Steel has been engaging regularly with participating companies and based on their feedback, there is a recognized opportunity to re-announce the scheme to encourage further participation.”
The idea of Production-Linked Incentives (PLI) was introduced during the global lockdowns of 2020 to address the need for enhancing domestic manufacturing capabilities. Initially targeted at three sectors, the PLI scheme was later expanded to include the steel sector in November 2020.
Additionally, the Ministry of Steel is developing the ‘Green Steel Mission’, projected to cost Rs 15,000 crore, with the goal of assisting the steel industry in reducing carbon emissions and moving towards the Net Zero Target.
This mission encompasses a PLI scheme specifically for Green Steel, incentives for renewable energy utilization, and mandates for government agencies to procure green steel, thereby enhancing the industry's environmental sustainability.
The National Green Hydrogen Mission, led by the Ministry of New and Renewable Energy, incorporates the steel sector into the larger objective of producing and utilizing green hydrogen, aiding in the decarbonization of steel production.
A report titled 'Greening the Steel Sector in India', based on recommendations from 14 Task Forces formed by the Ministry of Steel, was published in September this year. This was succeeded by the release of the Taxonomy of Green Steel for India earlier this month, which establishes a star rating system for green steel. The Steel Scrap Recycling Policy also supports these initiatives by enhancing the availability of domestically sourced scrap, thereby promoting resource efficiency.
The Ministry revealed the Taxonomy for Green Steel on December 12, 2024, to create standards for defining and categorizing low-emission steel, facilitating the green transition within the steel sector. This framework aims to support the production of green steel, establish a market for it, and secure financial backing.
The Ministry of New and Renewable Energy (MNRE) has initiated the National Green Hydrogen Mission for the production and utilization of green hydrogen. The steel sector plays a crucial role in this mission and has been allocated a budget of Rs 455 crore to implement pilot projects in the iron and steel industry through the fiscal year 2029-30.
Under this mission, the Ministry of Steel has granted two pilot projects aimed at producing Direct Reduced Iron (DRI) using 100% hydrogen in vertical shaft furnaces, alongside one pilot project utilizing hydrogen in existing blast furnaces to decrease coal and coke consumption, announced in September this year. Plans are also underway to explore pilot projects for the injection of green hydrogen in current vertical shaft-based DRI production units to partially substitute natural gas.
The government is crafting a comprehensive global strategy aimed at establishing India as a leader in the steel industry, capable of fulfilling domestic demands while also becoming a major exporter. A Working Group has been formed to develop India's Steel Global Outlook Strategy, focusing on four strategic collaboration areas: Raw Materials, Investments, Technologies, and Steel Exports. Following extensive stakeholder consultations, a Strategy Paper will be created to identify key cooperation areas and action plans for priority countries.
